Do it yourself, or bring in support.
You own the hardware either way. The only thing that changes is who does the sourcing, the monitoring and the coordination, and what that costs you in fees, time and tax position.
3 min readThe choice is narrower than it is usually made to look.
This gets written up as two different products. It is not. In both cases your business buys machines, the machines sit in a facility under a hosting agreement, and the output goes to a wallet you control. The asset, the contracts and the coin are yours on either path.
What differs is who does the work around it, and there is less mystique in that work than the industry likes to suggest. It is procurement, contract review, watching dashboards, chasing repairs and keeping records. None of it is beyond a capable owner. It is a question of whether you want to spend your attention there.
What doing it yourself actually involves.
Sourcing
The secondary ASIC market carries real fraud risk: units sold as new that are not, firmware flashed to misreport, and sellers who take payment and do not ship. Buying direct from a manufacturer avoids most of that and brings lead times and minimum quantities instead.
Facility diligence
Reading the hosting agreement properly matters more than the headline rate. Term length, termination fees, the conditions under which the rate can move, the notice period you get, and the security interest the facility takes over your machines and their output.
Deployment
Getting machines racked, connected, pointed at a pool and configured, then confirming they are producing what the specification says they should.
Monitoring and repair
Machines fail. Fans and power supplies are consumables. Somebody has to notice a unit has dropped off and get it back, and the facility will generally not chase it for you.
Records
Serials, invoices, energisation dates per machine, hosting costs by site and per reward production data. Assembling this after the fact is considerably harder than collecting it as you go.
What I do, and what I am not.
I source hardware, monitor the fleet, coordinate with facilities and report. That is the list. You own the machines, you sign the hosting agreements, you hold the pool account and the wallet, and every decision is yours to make.
I should be plain about scale, because the industry is not. MinerOps is me, plus facility and vendor relationships. There are no technicians, no operations floor and no overnight shift. On a large deployment that concentration is a genuine risk to you and you should weigh it as one. If I were unavailable, everything material is already in your name and you could deal with the facilities directly or appoint someone else, which is not true of every arrangement in this industry.
The fee is 3% of pool output, taken as a split at the pool rather than invoiced, so it only exists when the machines produce. Pricing sets out the whole structure.
The honest argument against using me.
There is a real case for doing this yourself, and it is stronger than the version usually presented by people in my position.
Your tax position may prefer it
Material participation under section 469 turns partly on your hours relative to everyone else’s. Work I do is work you are not doing, and on two of the three common tests that counts against you. If the deduction landing in the current year is central to your reasoning, this matters. It is set out in the passive activity trap.
A fee is a fee
3% of output is 3% of output. If you have the relationships and the time, you are paying for something you could do.
You might want to learn it
Some owners want to understand the operation properly rather than receive a report about it. That is a good reason and I would not argue you out of it.
Dependency on one person
Covered above, and it is the strongest objection on this page.
How to actually decide.
Ask what your time is worth to you and how much of it this would take, honestly rather than optimistically. Ask whether you already have a hardware source and a facility you trust, because if you do, most of what I offer is redundant. Then ask your accountant what your involvement level needs to look like for the tax position you are hoping for.
If those three answers point at doing it yourself, do it yourself. I would rather tell you that on a call than take on someone who was going to resent the fee within a year.
Find out which one fits.
Thirty minutes on your capital, your timeline and your entity. If doing it yourself is the better answer for you, I will say so. You can also read how it works and what can go wrong.
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